The World Bank Group is supporting Ghana’s Sankofa Gas Project through a package of World Bank Guarantees to the tune of $700 million.
The proposed guarantees will mobilise the much-needed private investment in Ghana’s domestic gas sector and facilitate an investment of up to $7.9 billion by private sponsors.
This would be one of the largest foreign private investments in sub-Saharan Africa in recent years.
According to a release from the World Bank office in Ghana, “The Project aims to increase the availability of natural gas for power generation by leveraging private capital investment”.
What the project entails
The Sankofa Gas Project entails the development and exploration of two offshore natural gas fields within the Offshore Cape Three Points (OCTP) exploration block. The OCTP block is located 60km offshore of Western Ghana and comprises the Sankofa and Gye Nyame gas fields (together “Sankofa Gas Field”) and the physically distinct Sankofa East oil field.
Although the exploration/production of both gas and oil fields will be integrated through a single floating production and storage unit, the commercial arrangements for the oil and natural gas production will be separate.
How revenue will accrue
The release said the project “will generate fiscal revenues for Ghana through royalties, income tax and GNPC’s (the national petroleum company) 20 per cent interest in the project.”
The project sponsors have conducted an Environmental, Social, and Health Impact Assessment (ESHIA) that has been reviewed and disclosed by the World Bank Group. The ESHIA identified several positive impacts of the Project on the local community, including skills development, jobs, and contracting opportunities for goods and services to the Project.
The ESHIA also indicates that the development of OCTP could potentially lead to the economic displacement of farming in the area and provides for mitigation measures in line with the World Bank Group’s Performance Standards.
Other potential environmental, social, health and safety impacts of the planned activities are low to moderate and can also be mitigated.
The World Bank Group’s engagement in the energy sector is intended to help Ghana secure the affordable, reliable, and sustainable energy supply needed for development, poverty reduction and the promotion of shared prosperity.
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